Nifty 50 tops 23,400, Sensex settles off day's lows as banking stocks outperform; broader markets shine

CPI cooled to multi-year lows at 3.34 percent for March, leading to banking stocks cheering in trade.

Benchmark indices Nifty 50 and Sensex settled off the day's lows in the afternoon session on April 16, paring intraday losses to record gains during the second half of trade.  Last hour buying propelled the indices to snap out of the lackluster period.

At close, the Sensex was up 309.40 points or 0.40 percent at 77,044.29, and the Nifty was up 108.65 points or 0.47 percent at 23,437.20. Despite the volatility seen during the session, the market breadth was in favour of the bulls as 2,561 shares advanced, 1,244 shares declined, and 129 shares remained unchanged.

Over the session, investors went bottom-fishing in the beaten down broader markets, leading to the Nifty Midcap 100 and Nifty Smallcap 100 index gaining half a percent and a full percent, respectively.

IndusInd Bank was among the top gainers over the session, after an external probe revealed that the lender would take a lesser hit to its net worth, as a result of the discrepancies found in its derivatives portfolio.

The report by the external agency showed Rs 1,979 crore of ‘negative impact’ to the net worth of the bank due to the derivative discrepancies. Based on the report, the bank said that it has assessed an adverse impact of 2.27 percent to its net worth.

"Support is now placed at 23,300, and a positive sentiment is likely to prevail as long as it remains above this level. A decisive fall below 23,300 might trigger a correction towards 23,150/23,000. On the higher side, resistance is visible at 23,650," said Rupak De, Senior Technical Analyst at LKP Securities.

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Consumer price inflation cooled to multi-year lows at 3.34 percent for the month of March. Banking stocks led the gains in trade over the session, as the easing CPI led to investors betting on a deeper rate cut cycle by the Reserve Bank of India. The Nifty Bank index was among the top sectoral gainers, jumping 1.4 percent.

However, gold were stole shine in trade, hitting a lifetime high of Rs 95,000 per ten grams on the MCX. A weaker dollar, trade war tensions and concerns over global economic growth due to U.S. President Donald Trump's tariff plans which led to safe-haven inflows into the precious metal.

Despite the three session gaining streak for the headline indices, market experts continue to advise caution. "The market is indicating calm after the storm. But investors should not jump to the conclusion that stability has returned to the market and it is poised for further up moves," said K Vijayakumar, Chief Investment Strategist, Geojit Investments, adding, "More actions, reactions and volatility are on the cards."

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